25 February 2003 -- A host of new markets and applications for softswitches has offset what would have been a much more dramatic decline in the softswitch market in 2002 and will lead to industry growth in 2003 and beyond, reports In-Stat/MDR in its report "Softswitch Vendors Pursue New Markets and Applications". Despite a 4% decline in 2002, the softswitch market will grow at a compound annual growth rate (CAGR) of 65% to USD1.454bn in 2007.
"The downturn in the telecommunications industry has caused softswitch vendors to seek new markets and applications for their products," says director Norm Bogen. "Some vendors are targeting the cable industry, as cable MSOs seem to have more to gain from adding voice to their bundle of services than traditional telcos can gain from a circuit-to-packet transition. Others are targeting wireless carriers with new solutions for their mobile switching centres (MSCs). Some vendors are targeting wireline service providers in countries that have recently deregulated, or will soon deregulate, their telecoms industry." Also, new applications, like IP Centrex and VoIP VPN, are creating additional opportunities for softswitches.
In-Stat/MDR has also found that:
- Large incumbent local exchange carriers worldwide hold the key to success in this market. These large incumbents will transition their access tandem networks to packet voice prior to transitioning their local switches.
- The worldwide softswitch market continues to be fragmented, with no single vendor garnering even an 11% market share. Shipment estimates place Ericsson as the market leader with a 10.3% share followed closely by Nortel with a 10.1% share.
- Unlike many new technologies, softswitches are seeing deployments in all regions of the world. One reason for this is that, as countries deregulate their telecoms industry, new companies spring up to compete with incumbent providers.